What is a Priority Claim?

Although not much of an issue for many Bucks County bankruptcy filers for Chapter 7 or Chapter 13, priority claims do pop up from time to time.

The public policy behind priority claims are that not all unsecured claims are equal. There is an order in which claims are paid. This is called “Priority”. Examples of priority claims are: unpaid child support, bankruptcy administrative costs, unpaid employee wages up to $10,950 per employee and unpaid contributions of employee pension plans.

All priority claims must be paid in full before other lesser claims in a Chapter 13. In a Chapter 7, these debts are not discharged, though the attempt to collect is temporarily halted under the 'Automatic Stay' provision.

Most frequently, unpaid taxes and child support are encountered most frequently when people meet with a Bucks County bankruptcy attorney. Just remember -- You will still be "on the hook" for priority claims, even though they are not part of a Reaffirmation Agreement and even though they are not secured by real property.